No decision yet on Posco project

Korean steel giant Posco on Wednesday said no decision on signing a memorandum of understanding with Orissa government on setting up a 12-million tonne steel project had been taken as the company was awaiting reply from the Naveen Patnaik government on its proposal.

"The Orissa government suggests that the MoU be signed on June 22. But we have not taken any decision in this connection as we are still awaiting a reply from the Orissa government on our project proposal," a senior Posco official said. He refuted media reports that the company was all set to ink the MoU with the state government.

The project is a part of Pohang Steel Company's drive to expand its production capacity. Besides a 12-million tonne steel plant, the proposal envisages constructing a 30-million tonne iron ore mine.

The entire enterprise would cost an estimated $12 billion. The company official said Posco was willing to go ahead with the project and had agreed not to export ore from India, a decision that had been conveyed to the Orissa government.

A couple of months ago, Posco, the fifth largest steel company in the world, had pulled out of negotiations with the Orissa government after reported disagreement on the issue of export of iron ore.

Posco sold a chunk of its output in South Korea and the remaining to China.